Dili: The Asian Development Bank (ADB), the Government of Canada, the Japan International Cooperation Agency (JICA), and the World Bank Group have joined forces to support Timor-Leste's inaugural utility-scale solar and battery storage project. This initiative is set to accelerate the nation's energy transition, create jobs, and foster sustainable growth and prosperity.
According to Asian Development Bank, this landmark investment, which marks Timor-Leste's first independent power producer project, will be managed by Manatuto Renewables Power. It aims to transform the country's energy landscape by decreasing its dependency on imported diesel. The project aligns with the National Strategic Development Plan 2011-2030, which aspires to meet 50% of energy needs from renewable sources by 2030. Paulo da Silva, Executive Commission President of Electricidade de Timor-Leste, Empresa Publica (EDTL, E.P.), emphasized that the project will reduce energy costs, bolster energy security, and pave the way for a cleaner, more sustainable future for Timor-Leste's residents.
The project encompasses the development, construction, operation, and maintenance of a 73.7 megawatt-AC grid-connected solar photovoltaic plant, an 80.2 megawatt-hour battery energy storage system, transmission lines, and ancillary facilities. The electricity generated annually will cater to approximately 80,000 households, impacting around 400,000 people in Timor-Leste. The electricity will be sold to EDTL, E.P. under a 25-year power purchase agreement.
The $85.7 million financing package includes $12.2 million in senior loans from ADB, $19 million from the World Bank Group's International Finance Corporation (IFC), and $12.2 million from JICA. Additionally, concessional loans totalling $21.2 million come from ADB's Leading Asia's Private Infrastructure Fund 2 (LEAP2), supported by JICA and the Canadian Climate and Nature Fund for the Private Sector in Asia (CANPA), backed by the Government of Canada, as well as $21.2 million from the World Bank Group's International Development Association's Private Sector Window (IDA PSW) and the IFC Concessional Capital Window.
ADB served as the transaction advisor to EDTL, E.P., leading the structuring and competitive procurement process, which was awarded to EDF power solutions, S.A., a subsidiary of EDF Group, and I-Environment Investments Pacific Pty Ltd, a subsidiary of ITOCHU Corporation. The World Bank Group acted as the lead arranger for the loan package.
Michael Walsh, ADB Country Operations Head for Timor-Leste, expressed pride in facilitating Timor-Leste's first private sector investment in utility-scale solar and battery technology. By mobilizing concessional financing and demonstrating the feasibility of private sector investment in the utility-scale energy sector, the project aims to build investor confidence in renewables, especially in regions affected by fragility and conflict, as well as small island developing nations.
Alice Birnbaum, Canada's Head of Development Cooperation and Charg©e d'affaires at the Embassy of Canada to Indonesia and Timor-Leste, highlighted Canada's pride in supporting Timor-Leste's first privately-led renewable energy investment, marking Canada's first climate-fund investment in the country through the Asian Development Bank.
JICA's Director General, Private Sector Partnership and Finance Department, Takehiro Yasui, expressed JICA's pleasure in supporting Timor-Leste's first privately financed independent power producer solar project. JICA aims to contribute to the sustainable development of Timor-Leste's power sector and further strengthen the partnership between Japan and Timor-Leste.
David Freedman, World Bank Group Representative for Timor-Leste, described the project as a landmark for the country, supporting its transition to a more resilient and affordable energy future. The World Bank Group supports the project by combining IFC financing, IDA-backed blended finance, and MIGA guarantees to encourage private investment, reduce dependence on imported diesel, and create new growth and employment opportunities in Timor-Leste.
MIGA, part of the World Bank Group Guarantee Platform, has approved a 20-year political risk insurance guarantee for EDF power solutions and I-Environment Investments Pacific, covering their investments in Manatuto Renewables Power. A portion of this will come from the MIGA Guarantee Facility, part of the IDA PSW, as a first loss layer.
These instruments collectively aim to validate the viability of renewable energy investments in Timor-Leste and mobilize private capital for public benefit.